Trade Talk Blog: A Chat with “Chat With Traders”

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Aaron Fifield, host of Chat with Traders

Aaron Fifield is a developing trader and host of the Chat With Traders podcast. Each week, thousands listen as he interviews successful traders and financial thought-leaders to extract their best insight. His inquisitivity goes beyond the mic. On the trading front, Aaron is learning how to code and pursuing algorithmic trading systems. This week, we’ve turned the tables on Aaron. And here are five questions with him.

Brian Mehta, CMO

How did you got involved in trading and what was your path to where you are now?

Aaron: After a short stint of trading a demo account, I went live with a $5,000 account. It was all very new and I’d never done anything like it, so I of course made a bunch of mistakes, i.e., taking positions far greater than I should have, paying too much for brokerage, making irrational decisions and falling victim to FOMO.

Skipping forward a few years, I’d had mixed results. My account went from red to green, green to red, and the cycle continued—and a frustrating cycle it was. It’s worth mentioning, during this time I slowly drifted away from the “Gann way” and began to formulate my own strategies and setups—but still, mixed results.

One day, I had the realization that if I really wanted to make something with this whole trading thing, something had to change. After all, the definition of insanity is doing the same thing over and over again expecting different results. And I knew I was kidding myself if I thought I could make it on my own.

Take another leap forward, to January ’15; this is the point where Chat With Traders comes into the picture—a weekly podcast I started, where I interview profitable traders to extract some of their greatest insights. Without question, this has exposed me (and listeners) to many areas and aspects of trading which I was previously oblivious to. One of those being quantitative/algorithmic trading.

Do you have a single greatest lesson learned in trading?

Aaron: One day, when reviewing my past three months worth of trades, I noticed there was little consistency across the board. My reason for entering a trade was vastly different each time, and my decisions were based upon on a broad range of varying factors.

The way I see it, the issue with trading this way is you never get a large enough number of trades to accurately determine how effective your approach really is, as each trade is essentially a one-off scenario.

This is what partially attracted me to more of a systematic approach, but I feel as though the same considerations can be made with any style of of trading. As a trader, there are an infinite amount of factors that you could base your trades upon, but whatever you decide, I think it’s important be consistent and decide what you do and do not factor into your trading decisions.

What projects are you’re working on now?

Aaron: On the podcast front, I’m continually reaching out to lock in more great guests/traders/financial thought-leaders who have a lot of value to share. There’s some big names in the pipeline, as well as some names who typically keep a low profile from the public spotlight.

I’ve also been bouncing around the idea of putting together a quant team under the Chat With Traders umbrella, which would be almost like a think tank community, an information resource and more, for traders who are keen to pursue a quantitative/algorithmic approach. Needless to say, exciting times ahead!

What are your top three requirements in a trading platform?

Aaron: It’s tough going to find a platform that ticks all the boxes, but three things that are high on my list:

Clean UI/UX – Coming from a background in design, it’s difficult for me to work with anything that is ugly to look at and clunky to use.

Cloud-Based – To be able to easily access your platform from any device is a huge bonus—whether you’re at your desk, on your laptop, or on your phone. One of the benefits of being a trader is that you don’t have to be stuck to any one location, so it’s ideal if you can take your platform with you.

Backtesting/Automation Support – This may or may not be important to you, depends on your style. But for me, I would like to ultimately automate strategies and will therefore need a platform that supports automation (API access).

Do you have a “greatest trading event” story related to an epic winner or loser for yourself or another trader?

Aaron: I had been tracking an Australian resource stock for months, literally months! After five months of consolidating, the price again began to break out to the downside. I got short with a reasonably tight stop, and the price continued in my favor. About a week later, I added to the position and trailed a stop above each lower swing high.

Thirty days into the trade, the stock opened with a violent gap down and fell like a stone during the morning session. At the low of the day, the price was 30% below the close of the prior day—and also the worst performing day for the stock in the last 10 or more years. A nice time to be short!

But as the day went on, the price began to creep up, serious buyers were coming in, and the sizeable profit on my screen began to shrink. I must admit, I didn’t know what to do; I knew where I was getting out if the trade went against me, but I didn’t have an exit plan (let alone a plan that factored in an event like this). Seeing as I’d never traded through anything like this before, and I was well and truly in the green on a trade I’d been stalking for quite some time, I went ahead and closed the position early in the afternoon.

My account grew by roughly 30% after that trade. And as it turns out, that day remains the all time low. Ahh, the irony.